The Boss Of Heaven And Earth Reorganized The Media Empire.

With Beijing's famous nightclub "heaven and earth" being sealed up recently, Qin Hui's once big boss was pushed to the media spotlight.

After 5 years of fading out of the public eye, he has no relationship with "heaven on earth", and his huge media industry has become a more noteworthy focus.

Recently, a series of moves by 00198.HK, a Hong Kong stock listed company of Star Media Group, showed that Qin Hui returned to the capital market and opened the restructure of the star empire.

Asset injection accelerated restructuring

In May 12th, star international announced that the plan to sell 504 million shares at the maximum price of HK $0.435 per share has been completed.

The shares are about 16.67% of the capital stock after the expansion, and the total sale of the shares is HK $219 million.

After the sale, the direct shareholding of Qin Hui, the largest shareholder of the company, dropped from 50.79% to 43.18%. At the same time, Qin Hui's shareholding from Strategic Media International Limited declined to 13.44% from 11.42%.

"From the company's point of view, it is not short of money now, but financing does help the scale of existing businesses and expansion of other businesses."

Hu Yidong, executive director of star international, who plays an important role in the reorganization of the star system, has accepted the interview with the times weekly.

In May 2nd, the announcement of the placement of star international showed that the proceeds from the rights issue would be mainly used to expand the international core business, acquisition and investment.

In April 26th, star international announced that it would take up a total of about 4 million 540 thousand US dollars to acquire Photon stake in the post production business.

It is expected that the two sides will sign a formal agreement in July this year and complete the paction in the third quarter of this year.

Hu Yidong said that with the promotion and development of 3D film and television, star international will also increase investment in this part of the business.

"This part is also a key point of our business. We will not just be a movie theater.

{page_break}

In fact, the acquisition of Photon is only a step in the overall restructuring of star international.

At the end of last year, star America announced the purchase intention contract with Tan Hui, which reorganized the listed companies.

After the reorganization is completed, an asset of not less than 10 cinemas and film production facilities will be injected into star international.

As the largest shareholder of the assets and the star international, Qin Hui assured the star international that the profits of the cinema assets injected into the listed company will be 80 million yuan by the end of this year.

In 2008, stellar international lost HK $28 million 231 thousand, while in its latest earnings report, the company's net profit for the 9 months ended December 2009 was only HK $24 million 2 thousand.

On the day of the completion of the theater injection, star international's stock price was eye-catching, and its intraday price rose to HK $0.37 on that day, the highest increase of 10.4%.

In the completion of the injection of cinema assets, Qin Hui also began to layout his own people to run the company.

The former chairman and executive director Wang had other reasons for resignation, and Qin Hui's younger brother, Qin Hong, took over the chairmanship. Li Kai took over the post of executive director.

Qin Hui's injection of assets into star international is only part of the reorganization and integration plan of Star Media Group this year.

In October last year, Qin Hui held a high-level meeting in Beijing. Qin Hui set down the Star Media Group in 2010 to complete the historical debt solution. At the same time, the group's work will focus on developing downstream business.

Hu Yidong told the times weekly reporter that more high-quality assets will be injected into the listed companies in the future. The goal is to inject all the upstream and downstream industrial chains of the media industry into listed companies, so as to achieve the overall listing.

Planning for the listing of star America

In fact, on the way of the group's overall listing, the Star Media Group does not only have the capital platform of star international.

In December 10, 2009, Chen Guoqiang, the former shareholder of 00491.HK, sold his 347 million 800 thousand shares of Han media shares at a premium of 1.7 times.

In the acquisition of this part of the shares, Qin Hui also shares the 176 million shares of other shareholders held by the Han media, increasing the shareholding ratio to 22.6%, becoming the single largest shareholder of the company.

After the completion of the equity purchase, executives from star international entered the Chinese media.

Hu Yidong said that in the future, in terms of business, there will be corresponding integration and separation between the star international and the Chinese media. The two companies' businesses will not overlap.

"At present, Chinese media companies have no big moves. Our main goal at present is to make this company beautiful."

The international business system of star America is mainly divided into three parts. Besides being injected into the terminal assets of the listed companies, the production of the film and TV production base and the production and distribution of the movie and TV play also occupy a large proportion of the two businesses.

Hu Yidong said that at present, stellar international has vigorously injected into the cinema assets, which does not mean that the future development direction is partial to this business.

In the future, the share of the listed companies will probably be maintained at around 30%.

In addition to the channel of film distribution, star international will also work hard in the upstream industry of film and television production.

Beijing Huairou film and television base, which is to be acquired by star international, is being rebuilt. The largest film production base in China will be injected into the listed company.

According to star Mei international executives interviewed by the media, "although the star system is completely withdrawn from the A shares, according to our preliminary plan, it is expected to return to the A shares after completing the overall injection of its media assets."

{page_break}

However, in the process of the overall listing of media assets, Qin Hui also encountered many problems.

In 2008, in order to raise funds for restructuring, Qin Hui mortgaged Carsen Yeung's 261 million shares of 08010.HK, the parent company of Hongkong daily, to a 60 million yuan loan.

Qin Hui published a notice at the end of last year that he gave up 261 million shares to Carsen Yeung, so that he could continue to manage the newspaper.

But later, Qin Hui suddenly changed his mind and signed his signature. The loan and the agreement were not effective, and he was unwilling to hand over the shares.

Until May 4th of this year, the high court of Hongkong High Court ruled that Qin Hui was in short supply and sentenced Carsen Yeung to the right to acquire the shares.

In addition, the short-term funding problems brought about by restructuring will also affect the performance of listed companies.

Qin Hui's brother, chairman of the star international company, Hong Hong, also said in a listed company's report: "for the reorganization of the company, we still have a lot of work to do.

The cost of restructuring and the provision due to restructuring will lead to a decline in overall profits in 2009 and 2010.

But these will end by the end of 2010. "